Which market is right for you?
What’s the best market to invest in?
Most investors think a good deal is based on yield. But in reality, investing is all about location. Are people moving there? Is there job growth? Is it easy to keep and find paying tenants? The list goes on.
Specifically, your success as an investor is based on two criteria around location:
1. The location you buy in
2. The team you hire in that location (we’ll dive into this topic later next week)
For now, we’ll focus on finding the best properties for you to invest in for 2021, and where they are.
After years of research, we’ve discovered the best deals are not on everyone’s radar - and definitely not on any Forbes list.
Most high-profile cities don’t fit the criteria for cashflow properties that make sense for investing. No matter what location you choose to focus on, you must keep these categories of different markets in mind:
- High Cash Flow, High Appreciation
- High Appreciation, Low Cash Flow
- Low Appreciation, High Cashflow
So what are examples of great low-profile locations to invest in? Let’s break them down into real-life examples:
High Cash Flow, High Appreciation: Clarksville, TN
- Six-Plex Built in 1995
- Purchase Price $415,000
- Rents $4650 (tenants pay all utilities)
- Appraised Value 6-Months Later $530,000 + $115,000
This is a market in which I personally invest and have assisted many of our members in purchasing. The deal above is one that I snatched up on my own. Because it's a desired place to live, I've amassed millions of dollars in this area. As a result, property values and rentals are rising, making it an excellent investment opportunity. It appraised for $115,000 higher ($530,000) around 6 months after purchase. Amazing!
Low Cash Flow, High Appreciation: Nampa, ID
- Duplex built in 2021
- Purchase price $385,000
- Rents $3,575 per month
- Appraised value $475,000 + $90,000
This means although you may not get much cash flow coming in, the property will still most likely increase in value over time. Given the appraisal value, it already has - upwards of $90,000. That’s pretty significant, especially for a new build.
High Cash Flow, Low Appreciation: Milwaukee, MN
- Purchase price $119,000
- Rents $1500
- Cash-on-cash return 21%
Finally, we’ve got a high cash flow and low appreciation. Lots of cash coming in for a property like this but the value may not go up significantly. It was (again) bought by one of our Inner Circle Investors and although it will have a lower appreciation rate, the cash on cash returns are 21% return.
With so many criteria and markets to consider, we wanted to make it simple for you. Use our free Find Your Market Quiz to help you find a market that fits your needs.
P.S. Did the properties I list above peak your interest? Gain access to 20+ off-market deals across the country in your inbox every week by joining the Inner Circle. Or comment bellow with any questions you have about our community!
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